Pakistan To Speed Up Iran-Pak Pipeline Construction

Pakistan has announced that it intends to speed up construction of a $7.5 billion gas pipeline connecting Iran’s South Pars gas field to Pakistan and the rest of South Asia, reports Maria Golovnina for Reuters. The pipeline has been delayed partially because of US objections that it violates international sanctions on Iran (Iran and Pakistan both deny that the pipeline violates sanctions), and partially because they have been strapped for cash. Iran has mostly finished its section of the pipeline leading up to the two countries’ border.

No specific timetable for the pipeline provided

“It was also agreed that a meeting will be held shortly between the experts of both sides to review parameters for accelerating work on IP Gas pipeline,” Pakistan’s foreign ministry said in a statement, although no specific timetable was given. The old timetable called for the pipeline to be completed and gas flowing by the end of 2014, although some people called that unrealistic when it was first announced. As more details come out, analysts will be able to determine if speeding up the process is realistic or simply a negotiating maneuver for the next few months.

Pipeline construction could give Iran negotiating leverage

Iran has some of the world’s largest oil and gas reserves, but sanctions and animosity with the West have prevented it from reaching the high levels of production it had in the early 1970s. It recently signed a six-month deal with the P5+1 made up of the five permanent members of the UN Security Council (the US, UK, Russia, China, and France) and Germany regarding Iran’s nuclear program that could lead to a permanent treaty and the eventual end of sanctions. Iran has long contended that its nuclear program is only for peaceful purposes, but there is little difference between civil and military nuclear programs in the early stages and the P5+1 want stricter controls on the program.

Even though Pakistan is a US ally, it has a clear interest in completing its section of the pipeline because cheap energy would give a boost to the country’s struggling economy. But when it does complete the pipeline, Iran will be under less pressure to end international sanctions and will have a stronger negotiating position with the P5+1.